KARACHI: The Customs’ Collectorate of Adjudication-II has served a show-cause notice on M/s Ghani Hilal Feed Mill Lahore for allegedly evading Rs 7.19 million tax on import of silos classifiable under PCT Heading 9406.0030, it is learnt.
The evasion of sales tax was found during the scrutiny of import data pertaining to silos by the Post Clearance Audit. The importer M/s Ghani Hilal Feed Mill (Pvt) Limited had imported silos from China and availed concession of 8th Schedule (Sales Tax) and paid reduced rates of sales tax at 5 percent on the import of “grain storage silos with all standard accessories” under PCT Heading 9406.0030.
The 8th Schedule (Sales Tax) extends benefits of reduced rate of sales tax to “machinery and equipment” for development of grain handling and storage facilities only. Whereas the silos are for storage purposes and do not qualifies the definition of machinery and equipments, sources added.
Therefore, the sources said that the benefits of reduced rate of Sales Tax was not admissible in this case and was chargeable to Sales Tax at 17 percent.
After detection of the contravention, the Directorate of PCA has forwarded the report to the respective collectorates and the Customs Adjudication for initiating adjudication proceedings and recovery thereof, the sources further informed.
The Collectorate of Adjudication-II has recently issued a show-cause notice asking the importer to justify their position or pay the evaded amount.
